Nikkei Consecutive Dividend Growth Stock Index

Index Guidebook

Nikkei Inc.

・This document is the index guidebook of the Nikkei Consecutive Dividend GrowthStock Index calculated and published by Nikkei Inc. (Nikkei). The document isdrawn up by Nikkei and it would be changed or modified corresponding to therevision of the index calculation rule etc.
・ Copyright of this document is owned by Nikkei, and any copies , reprints andreproduction of this document are prohibited without the prior approval ofNikkei. This document is prepared solely for the understanding of the index that
Nikkei calculates and publishes, and it is not to be construed as a solicitation or
an offer to buy or sell any securities or related financial instruments.
・ This English document is a translation of the original document dated June 30,2023 in Japanese and may not be an entirely accurate translation of the original
Japanese document. In any case where differences arise between the English
version and the original Japanese version, the original Japanese document willprevail.

(June 30, 2023 version)

GB-CDG-E-202306301: Introduction“Nikkei Consecutive Dividend Growth Stock Index” is a market value weightedindex that comprises stocks with consecutive dividend growths.

2: NameJapaneseEnglish： 日経連続増配株指数： Nikkei Consecutive Dividend Growth Stock Index

3: Constituents Management(1) Basic Point
The Nikkei Consecutive Dividend Growth Stock Index compris es 70 issues thathave a track record of consecutively increasing their dividends for a minimum of
10 fiscal years in principle. The Periodic Review is conducted at the end of Juneevery year. While the removal of certain constituents may result in the index
temporarily having less than 70 issues, the constituent will not be added until t henext Periodic Review, when t he number of constituents will be restored to theprescribed level.
(2) Universe
The index constituents are selected from all listed issues in Japan save for issues
listed on TOKYO PRO Market, exchange traded funds (ETFs), real estate
investment trusts (REITs), stocks other than common stocks such as preferred
equity securities, Securities to be Delisted, and Securities on Alert.
(3) Periodic Review
・ The Base Date of the Periodic Review shall be the final business day of May ofeach year. The constituent stocks shall be selected by the process described below
and the constituent change shall be effective on the final business day of thefollowing month. The constituent change on the Periodic Review will beannounced a sufficient period in advance of the effective date.
・ Issues in the universe defined above are ranked* based on the consecutive years inwhich they have increased dividends per share (cash dividends includingcommemorative and special dividends ) during the latest fiscal year that ended up
until March of the Base Date year. Dividends are adjusted considering splits andconsolidations of stocks. Dividends paid in irregular accounting periods withCopyright © Nikkei Inc. All rights reserved.

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more or less than 12 months are not converted to 12-month basis. A total of 70
issues are selected according to the ranking. Nonetheless, issues fall into
following conditions I to IV are not included in the ranking:
I. Issues without any disclosures of the last earning reports in theaccounting period ending up to March in the last fiscal year.
II. Issues of which market capitalization are below the 40th percentile of theuniverse.
III. Issues that had no transaction on one or more days within the threemonths prior to the Base Date.
IV. Issues with a track record of consecutively increasing their dividends forless than 10 fiscal years.

(*) The eligible issues are sorted in descending order. The number of years ofconsecutive dividend growth shall be counted only after the listing and from thefiscal year of the listing. Issues with a higher actual dividend yield, which iscalculated using adjusted dividends per share of the last fiscal year, are ranked
higher when multiple companies have a track record of increasing dividends for thesame number of consecutive years.
When the number of issues eligible for the ranking is less than 70, only theeligible issues are selected for the index. If the number of eligible issues is lessthan 30, a total of 30 issues are selected based on the ranking following theconditions other than condition IV.
(4) Extraordinary Removal
・ In case that a constituent is designated as a “Security to be Delisted” or “Securityon Alert”, it will be deleted from the index 5 business days after the designation
date in principle.
・ In case that a constituent is delisted due to corporate restructuring such as merger,
it will be deleted from the index on the dat e of delisting in principle.
・ New constituents will not be added for the removals in principle.

(5) Constituents in the past and on the launch date・ With regards to the constituents used for the retroactive index calculations (see4-(7) mentioned afterwards), Nikkei shall choose issues following the steps
described in (3), and change the constituents on the final business day of thefollowing month.
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34： Index Calculation(1) Basic Point
・ The Nikkei Consecutive Dividend Growth Stock Index is calculated as a market
value weighted index.
・ The index level on June 30, 2010 (the Inception Date) is 10,000 points.
・ The unit of the index is points. The third digit is rounded to make the index have 2digits after the decimal point.
・ The index is calculated on an end-of-day basis.
(2) Calculation Formula・ The daily index value shall be calculated by the following formula.

Index value＝ Σ {Share price × Weight Factor} ÷ Divisor(3) Share price・ For the issues listed on more than one exchange, the price of the exchange in thefollowing order of priority is used for index calculation .
I. Tokyo Stock Exchange, II. Nagoya Stock Exchange, III. Fukuoka Stock
Exchange, IV. Sapporo Securities Exchange・ Prices used for the calculation are selected in the following order of priority.
I. Special Quote or sequential trade quote, II. Closing price, III. Base price(The base price is obtained based on the priority order of ex -rights theoreticalprice, the last special quote price or sequential trade quote price on the pre vious
day, and the closing price on the previous day.)(4) Weight Factor
・ The Weight Factor used for the index calculation (number of shares for the index)
shall be the number of issued common shares on the Base Date of the Periodic
Review.
・ At the timing of the Periodic Review, in determining the Weight Factor by theabove method, if the weight of an index constituent exceeds 5%, the Weight Factor
shall be adjusted to make the weight of the constituent within 5%.
・ After the Weight Factors are assigned, if an index constituent company makes astock split or reverse split, the Weight Factor shall be adjusted corresponding tothe ratio of the split or reverse split on the ex -date.
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4(5) Divisor
・ The Divisor on June 30, 2010 (the Inception Date) is determined by the followingformula.

Divisor＝ Σ {Share prices × Weight Factor on the Inception Date}÷10,000

・ After the Inception Date, the Divisor will be changed every time when the index
constituents are changed by using the following formula.

Divisor tomorrow＝ Divisor today× (Σ {base prices next day of the index constituents for the next day× Weight Factor for the next day})÷ (Σ {base prices today of the today’s constituents× today’s Weight Factor})

・ The fifth digit is rounded to make the Divisor have 4 digits after the decimal
point.
(6) Modification of the index value
・If any event occurs and comes out at a later date where it is necessary to modify theindex value, as a general rule, Nikkei reflects the modified data into the index
value on the index calculation date coming subsequently after the event comes out,as the date when the event occurs. Retroactive calculati on for the modification
will not be conducted in principle.

(7) Retroactive calculation in the past
・The index is retroactively calculated to the Inception Date (June 30, 2010=10,000)
on an end-of-day basis.
・ The constituents used for the retroactive calculation are determined described in3-(5).

5: Others

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(1) Total Return Index calculation
Nikkei calculates “Nikkei Consecutive Dividend Growth Stock Index (TotalReturn)”and “Nikkei Consecutive Dividend Growth Stock Index (Net TotalReturn)”as the related indexes of the “Nikkei Consecutive Dividend Growth StockIndex” by adding the dividends and the net dividends excluding taxes respectively.
These indexes are calculated on an end-of-day basis.
The “Nikkei Consecutive Dividend Growth Stock Index (Total Return)”
measures the performance of the Nikkei Consecutive Dividend Growth Stock Index ,including both the movements in the index prices and the reinvestment of thedividend incomes from the constituent stocks a t the closing ex-dividend dates,
corresponding to the Weight Factor. The Nikkei Consecutive Dividend Growth
Stock Index (Net Total Return) will use the dividends after the deductions of thetax for the calculation.
The basic points for the index calculation such as the way to use dividends shalladhere to the Nikkei 225 Total Return Index and the Nikkei 225 Net Total ReturnIndex.
(2) Index License“Nikkei Consecutive Dividend Growth Stock Index ”, along with its total returnand net total return indices, are copyrighted materials calculated in a methodology
independently developed and created by Nikkei Inc. Nikkei Inc. is the sole
exclusive owner of the copyright and other intellectual property rights in the
Nikkei Consecutive Dividend Growth Stock Index itself, the methodology tocalculate the Nikkei Consecutive Dividend Growth Stock Index . Licensing
agreement with Nikkei is necessary if companies intend to create Index - linked
funds and passive funds, etc. It is also required to use this index f or disseminating,providing, and showing, etc. to the third party in the way as Nikkei decides.
(3) Disclaimer
Nikkei has no obligation to continuously publish the Nikkei Consecutive
Dividend Growth Stock Index, along with its total return and net total r eturn
indices, and Nikkei is not responsible for any error, delay, or omission in theNikkei Consecutive Dividend Growth Stock Index . Nikkei is entitled to change thedetails of the Nikkei Consecutive Dividend Growth Stock Index and to suspend or
stop the calculation and the announcement of the index.
Although, in principle, the Nikkei Consecutive Dividend Growth Stock Index iscalculated and maintained in accordance with the information provided here,
Nikkei has discretion to take measures Nikkei deems ap propriate when the events
which are not covered in this document happen or under the circumstances where it

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is difficult to continue to calculate the index using the current rules . In addition,
the specifications described may be amended without notice. Ni kkei does notassume any loss or damage caused by the use of this document.
This English document may not be an entirely accurate translation of the original
Japanese document. In any case where differences arise between the English
version and the original Japanese version, the original Japanese document will
prevail.

(4) Contact
Index Business Office, Nikkei Inc.
mail: index@nex.nikkei.co.jp

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（ Appendix） Change of history in Index Guidebook
June 30, 2023 version

Initial version

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